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The Cyprus problem, the funding regulation for the Turkish Cypriots and
Kosovo were the main issues discussed during a meeting in Brussels
between Cypriot Minister of Foreign Affairs Erato Kozakou Marcoullis
and Enlargement Commissioner Olli Rehn.

During the meeting, Marcoullis expressed Cyprus` readiness to begin
implementing the 8 July 2006 agreement, after the presidential
elections on the island.

She noted that the 8 July agreement and the Gambari process had already
been adopted by the UN Security Council, the European Council of
December 2007 and the General Affairs Council on Monday, in the
framework of adopting the reviewed partnership agreement between EU and
Turkey.

Marcoullis said Turkey should be influenced towards implementing the
agreement and the process, adding that the EU`s role was important in
order to secure that what is agreed on would be in line with the acquis
communautaire and EU principles.

According to Marcoullis, Rehn expressed the Commission`s readiness to
contribute towards the commencement of the process after the
presidential elections, the first round of which will be held on
February 17 and the second on February 24.

He pointed out the importance of the agreement to be based on EU
principles, adding that the Commission was ready to play a part in the
process, although the Cyprus problem should remain within the UN
framework.

Cyprus Central Bank Governor Athanasios Orphanides said on Tuesday that
the subprime crisis in the US market is not expected to have any
serious impact on the Cypriot economy, while Finance Minister Michalis
Sarris reiterated that he expects economic growth around 4.0% for 2008,
compared to 4.4% for 2007.

``We expect a slowdown in the Euroarea, compared to our forecasts,``
Orphanides said, adding, ``at the moment we do not have particular
concerns regarding our growth.``

He clarified that a slowdown after very good forecasts for the Euroarea
is not something which should concern Cyprus,`` adding however ``the
main concern is the inflation tendencies, largely due to the oil prices
and particularly whether these inflation tendencies will be
consolidated this year.``

Regarding the crisis in the stock markets, Orphanides said, Given the
situation we do not predict any serious impact on the Cypriot market.``

On his part, Sarris referred to the growth rate of 4.4% achieved by
Cyprus in 2007 whereas in 2006 the growth rate reached 4%.

``And even if, as the Governor pointed out, (the economy) is affected
in 2008, we have strengthened the economy so that it will remain at
these level,`` he added.